It’s coming down to the wire in Winchester, where the northeast Connecticut town is banking on a big loan to keep the school district afloat.
The fate of more than 1,000 students and their schools remains in limbo.
Facing dire straits, at a meeting Thursday night, Winchester officially chose to pursue the best of three options to fund their schools.
The problem is that it’s still not guaranteed, and as the money is running out, time is, too.
Following the embezzlement of at least $2.5 million and the alleged history of monetary mismanagement overall, Winchester schools will be out of money by December.
“It’s devastating,” says Mayor Mary Ann Welcome.
The mayor says it comes down to three options now: the state advancing its funding from April 2014 to now, levying a town-wide tax or getting a private bank loan.
The Board of Selectmen decided the loan is the least painful of those options, but it’s no sure thing.
“Hopefully, the banks will fund us the loan and we’ll get back on track,” says Welcome.
The town manager has spoken with Bank of America and a bank in Simsbury about the prospect of a $2.5 million loan that Winchester needs.
The interest on that loan would likely be in the range of $30,000.
But that might be a small price to pay in lieu of the alternative.
“If we were able to get the bank commitment next week or what-not that we could move the situation fast so that the schools and everybody in town can feel more comfortable’” says selectwoman Candy Perez.
Perez says the loan, or the “grant anticipation note” as it’s known, would be repaid as soon as the state pays Winchester $4 million in the spring.
But it’s important to expedite that loan because the town’s money for schools runs out in less than two months.
“What happens is, the town, if we had a savings account, we would float the money for the state until then,” says Perez.
But the town is virtually without a savings account or rainy day fund with only $150,000 on hand, which is less than 1 percent of the overall budget.
So now it appears it all comes down to securing the loan.
“It’s not like this loan is a high risk because the money’s there. They’re going to get it in April,” says Mayor Welcome.
If the loan doesn’t come through, the town will have to try to get the state funding in advance, or hold a town vote to raise taxes.
The best case scenario: If the loan does get approved by the bank, the townspeople still have to approve that option at a referendum that would be held on Nov. 16.